Nationwide Building Society has confirmed it will no longer offer interest-only mortgages to new customers with effect from 11 October.
The news follows The Co-operative Bank's announcement in May that it will be pulling out of the interest-only market, whilst Santander, ING Direct, Leeds BS and Coventry BS have all reduced their maximum interest-only loan-to-values from 75% to 50%.
A spokesperson for Nationwide said: " We have decided that interest-only has become a niche product."
"We get few applications on an interest-only basis – less than 3 per cent – as borrowers want the certainty of a capital and interest mortgage. That is why we have decided to stop offering interest-only mortgages to new borrowers."
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